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Character reference checks still make sense in Asia?

Background Screening in Asia unlike western economies is still a relatively new concept for several organizations. Organizations like Banks, Insurance companies and Financial institutions have compliance requirements and hence conduct background checks. In contrast, other organizations from other industries need to be educated on the importance of background checks versus conducting character reference checks. Character reference checks with the references given by the candidates are pointless to a certain extent and though HR or Talent Acquisition leaders acknowledge this, they still continue this age-old practice. Personal references are even more limited in value as these opinions can’t possibly add any useful insights into the candidate’s work capabilities. Friends will “pay it forward” in exchange of same favour in future. This is exactly why some of the endorsements and recommendations on LinkedIn have started to lose popularity in Asia.

If the reference checks are done with the Candidate’s previous employer(s) and more precisely the supervisors, then this becomes a more valuable exercise. The check should have detailed parameters covering the various skill-set required for the role. Some of the generic parameters are shown in the figure (top of article – Source: Hiring Greatness: How to recruit your dream team and crush the competition by David E Perry, Mark J Haluska)

In Asia, where there are Personal Data Protection and Privacy Acts in various countries, the previous employers who are not obligated to provide the required information might be uncomfortable to release the information. At this stage, the signed letter of consent (assuming it’s thorough and compliant with the respective Data Protection laws) by Candidate/Employee can be shared with the previous employer(s). The probability that the previous employers might divulge the details is usually higher. The discussion on employment details and performance are typically done verbally (preferred mode in the emerging countries) or by email (developed economies prefer this).

By end of this exercise, the following information should have been gathered on the candidate or employee:

  • Joining and leaving dates
  • Reasons for leaving
  • Key achievements
  • Strengths and weaknesses
  • Ability to thrive under pressure
  • Relationships – both internal and external
  • Problem solving and decision making skills
  • Gaps with respect to the role requirements
  • For Leaders and Managers: Leadership and Management styles

Compared to developed economies like Singapore and Hong Kong, Philippines HR especially from the Business Process Outsourcing and Call Centres like a detailed analysis of the individual in a narrative form. This is an interesting cultural difference with respect to the other countries who prefer quick and crucial information and call out of red flags if any.

Many head-hunters still adhere to character reference checks and typically highlight the positives of the Candidates to the prospective employers. To have a more neutral assessment of the candidate, head-hunters have been directed by some of their clients to work with background screening vendors to conduct a background check on the Candidates from the head-hunters.

Regardless of whether organizations use head-hunters or acquire talents themselves, character reference checks should be replaced by a thorough background check consisting of employment details and employment performance. Asian organizations need to acknowledge the insufficiency of character reference checks and migrate to the detailed checks. This will ensure that Candidates of the highest “integrity” are employed. Adding to this, background screening companies are also able to conduct:

  • Criminal related checks: Criminal check, Civil Litigation check, Adverse media check, Global Sanction check and Identity check.
  • Finance related checks: Credit, Financial regulatory and Bankruptcy checks. 

Companies in Philippines and India even require drug-related screening, address verifications and so on.

In a nutshell, a complete 360 background check might not be possible but background screening companies are definitely able to do a more detailed check  than what character reference checks are capable of.

This article is written by Kannan Chettiar, Managing Director of Avvanz. Avvanz has 3 business pillars – Avvanz Hire (Recruitment Process Outsourcing and Comprehensive New Employee On-boarding), Avvanz Screen (including Psychometric Assessment and Background Screening) and Avvanz Develop (e-Training, Instructor-led Training and Blended Training). 

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